A Z-score is a numerical measurement that describes the relationship between a value and the mean of a set of values. The standard deviations from the mean are used to calculate the Z-score. When a Z-score is zero, it means the data point’s score is the same as the mean score. A number that is one standard deviation from the mean has a Z-score of 1.0. Z-scores can be either positive or negative, with a positive number indicating that the score is higher than the mean and a negative value suggests that it is lower. Z-scores are measurements of an observation’s variability in finance, and traders can use them to assist determine market volatility. The Altman Z-score is another name for the Z-score.